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Battered Britain hovers on the edge of double-dip recession OFFICIAL: Double dip!!!

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Craig234

Lifer
May 1, 2006
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You're trying to make this into a rich vs poor. I have put up links showing how absurd the change in wealth is now, but we both know that even with a 100% tax rate on the rich we still need austerity. The poor are simply taking more wealth than exists and the deficit can only be eradicated by giving them less.
Doppel, some inconvenient facts:

- Just because fair taxes won't entirely address budget issues doesn't mean they aren't important to do. NO one thing will do so, so we should do nothing?

- The budget proposal that balances the budget fastest is the Progressive budget, and it doens't have 'austerity'. It's not 'the poor' who are 'taking too much'.

Fact is, there is all kinds of wealth - being hoarded at the top. The poor are the problem, and spending more for the people helps the economy as well.

- Democrats are the only party that has ever turned huge deficits into a balanced budget.

Republicans are the only party that has ever turned a balanced budget into huge deficits in peacetime.

- Economic growth, the stock market, unemployment, incomes and other economic indicators all do much better under Democratic administrations nearly all the time - especially when Democrats have a super-majority in Congress as well. Our nation has done very well from the Democratic investments in the people of America and the infrastructure.

Not so much when the Republicans allow for wealth to be hoarded at the top, extracted with casino finance instead of invested for the good of the country.

This IS a rich versus poor thing, and the poor are not the problem. The rich paying more taxes and a more balanced distribution of wealth are very important for the people.

We don't need 'austerity', we need to reduce bad spending, we need efficiences such as single-payer healthcare, we need the wealth of the country not hoarded by a few.

Save234
 

Matt1970

Lifer
Mar 19, 2007
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You're trying to make this into a rich vs poor. I have put up links showing how absurd the change in wealth is now, but we both know that even with a 100% tax rate on the rich we still need austerity. The poor are simply taking more wealth than exists and the deficit can only be eradicated by giving them less.
The Liberals equate the prosperity at the top to disparity at the bottom. They blame the same tax cuts for rich for the disparity at the bottom even though taxes have been cut across the board. The only solution higher taxes brings is either more government jobs or larger government handouts.
 

Doppel

Lifer
Feb 5, 2011
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And austerity in a recession breeds even more poor people because it stifles broad economic growth.
But this is like saying gravity kills you if you've already fallen off a building and it's too late to stop. Or something...

When, then? US has been in a recession for many years. Its "growth" merely a paper over of reality, promoted hugely by deficit spending.
Mitt Romney and Paul Ryan want to try the failed austerity program in America.
Not really, they'll try the failed deficit spending, which we have had in play for a while. It works ok for a while but only if it's eventually paid down and no politician right now has any plans to do so at all. Nobody really thinks Romney will go for a balanced budget anymore than Obama ever tried to.
 

Matt1970

Lifer
Mar 19, 2007
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- Democrats are the only party that has ever turned huge deficits into a balanced budget.
Poor misguided MSNBC Deciple. Revenue was flat for almost 3 years after the Clinton Tax hike. Revenue only increased when Capital Gains Tax rates were cut and the Internet Bubble.
 

Matt1970

Lifer
Mar 19, 2007
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And austerity in a recession breeds even more poor people because it stifles broad economic growth.
The Government time and time again is poor inverstor. They can't even manage a never ending pyramid scheme, invest in bankrupt companies, piss-poor stimulus, etc....etc....
 

Craig234

Lifer
May 1, 2006
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But this is like saying gravity kills you if you've already fallen off a building and it's too late to stop. Or something...

When, then? US has been in a recession for many years. Its "growth" merely a paper over of reality, promoted hugely by deficit spending.Not really, they'll try the failed deficit spending, which we have had in play for a while. It works ok for a while but only if it's eventually paid down and no politician right now has any plans to do so at all. Nobody really thinks Romney will go for a balanced budget anymore than Obama ever tried to.
It takes time to recover the economy after a major crash - you are unreasonable to expect Obama to be recovering the economy by balancing the nudget his first couple years.

The Democrats will balance the budget (again) in time, if given the offices to do so (and not the Republicans allowed to block all their policies).

Republicans are for austerity AND deficits - they don't just chop Medicare by a third (to start), they take all that money and put it into tax cuts for the rich (again).
 

fskimospy

Elite Member
Mar 10, 2006
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This is another example of 'conservatism does not fail, it is only failed'. The lesson that the right will take from the failure of austerity is that they weren't austere enough. When cuts by governments depress revenues due to a shrinking economy, they just figure they must cut more.

I believe there would be a silver lining to this if I actually thought conservatives would take the abject failure of their economic policies as a lesson, one they would learn from. I see no evidence that this will take place. Sometimes I wonder exactly how much evidence conservatives will need before they admit they were wrong.
 

the DRIZZLE

Platinum Member
Sep 6, 2007
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He ignored my telling him to learn what he's talking about.

As usual, there's a simple and wrong myth in the right to push their ideology.

Funny, what period in US history is the longest without major financial crashes?

Hm, the same period the US had the strongest financial regulation, passed by FDR.

Clearly, we need more tax cuts to solve the financial industry.
Where did I say I was against regulation of the financial industry? Where was regulation of the financial industry even discussed in this thread until Jhhnn's post? You implied that austerity is means of shifting wealth the wealthy and posted a graph that showed increasing income inequality over the past 30 years. I pointed out how your argument was internally inconsistent and now you've changed to a different argument.
 

the DRIZZLE

Platinum Member
Sep 6, 2007
2,956
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This is another example of 'conservatism does not fail, it is only failed'. The lesson that the right will take from the failure of austerity is that they weren't austere enough. When cuts by governments depress revenues due to a shrinking economy, they just figure they must cut more.

I believe there would be a silver lining to this if I actually thought conservatives would take the abject failure of their economic policies as a lesson, one they would learn from. I see no evidence that this will take place. Sometimes I wonder exactly how much evidence conservatives will need before they admit they were wrong.
Many posters on here (yourself included?) have said that our problem is that the stimulus wasn't big enough. How is that any different?
 
Oct 16, 1999
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But this is like saying gravity kills you if you've already fallen off a building and it's too late to stop. Or something...

When, then? US has been in a recession for many years. Its "growth" merely a paper over of reality, promoted hugely by deficit spending.Not really, they'll try the failed deficit spending, which we have had in play for a while. It works ok for a while but only if it's eventually paid down and no politician right now has any plans to do so at all. Nobody really thinks Romney will go for a balanced budget anymore than Obama ever tried to.
You can't point to deficit spending under 30 years of mostly trickle down economics as an invalidation of deficit spending. And the deficit is not at crisis levels yet. The US dollar is still a reserve currency, we still have soverancy over that currency, we can still borrow at rates less than inflation, and we still have an extremely broad tax base. The debt crisis is an absolute canard and it's just poor economics to pass up opportunity for current and future growth because of past debt. It's like gambling your way into the poor house and using that as an excuse not to take out a business loan to get yourself out of it. I won't deny there is a lot of wasteful spending in government, but money that is spent on keeping a viable middle class and a healthy consumer base is not wasteful, especially during a recession.
 
Oct 16, 1999
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The Government time and time again is poor inverstor. They can't even manage a never ending pyramid scheme, invest in bankrupt companies, piss-poor stimulus, etc....etc....
No shit, the government is an investor of last resort. If it was likely a financially beneficial investment the private sector would handle it. And just because an investment may not be financially beneficial doesn't mean it's not a beneficial investment by other measures.
 

fskimospy

Elite Member
Mar 10, 2006
72,136
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Many posters on here (yourself included?) have said that our problem is that the stimulus wasn't big enough. How is that any different?
That should be pretty easy to figure out.

The 'failure' of the stimulus was in degree, not principle. The inadequacy of the stimulus was widely stated before it was ever enacted, because it was only about half the size of the output hole it had to fill. Still, its results were very much of the type predicted by its proponents. The stimulus vindicated the principles of Keynesian economics.

Austerity proponents on the other hand are not only consistently surprised at the ineffectiveness of their cuts in actually closing their budget deficits due to lost economic growth, but they actually claimed that this restoration of 'confidence' would lead to economic GROWTH, the exact opposite of what has really happened. ie: by the trajectory of their policies, had they enforced more austerity the results would have been even worse.
 

Craig234

Lifer
May 1, 2006
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If it was likely a financially beneficial investment the private sector would handle it.
Actually, that's questionable, with plenty of contradictory evidence.

For example, there was recently a documentary about the big dam in Washington State built by FDR.

There were local power companies, who simply wanted to keep their profits - they had no interest in a massive investment they couldn't afford for new power far more than the people needed. Wall Street similarly had no interest in the risk involved. Republicans in Congress said 'no' when in power, basic anti-government ideology.

This went on for about a decade with no funding.

But FDR built it with a huge investment. And sure enough, many people moved to the area taking advantage of the power, and it was great for the country.

Second example - say for the sake of argument that single-payer healthcare, like the rest of the world, will help our economy greatly, reducing inefficient costs for healthecare.

Will the 'private sector' make that investment on its own? No, it can't - it'll continue to invest in the private insurance companies and other inefficient, profitable structure.

Roads are a third example, public college a fourth, of things great for the economy the private sector isn't going to do on its own, with tiny exceptions.

Oh, we have a massive private college industry - filled with ripoffs and waste, overmarketing for profit.

The private sector does some things great, but so does the government, and both are very important to the economy.
 
Oct 16, 1999
10,497
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That should be pretty easy to figure out.

The 'failure' of the stimulus was in degree, not principle. The inadequacy of the stimulus was widely stated before it was ever enacted, because it was only about half the size of the output hole it had to fill. Still, its results were very much of the type predicted by its proponents. The stimulus vindicated the principles of Keynesian economics.

Austerity proponents on the other hand are not only consistently surprised at the ineffectiveness of their cuts in actually closing their budget deficits due to lost economic growth, but they actually claimed that this restoration of 'confidence' would lead to economic GROWTH, the exact opposite of what has really happened. ie: by the trajectory of their policies, had they enforced more austerity the results would have been even worse.
Just to reinforce the point, here's the "failed" stimulus in action:
 

the DRIZZLE

Platinum Member
Sep 6, 2007
2,956
1
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Actually, that's questionable, with plenty of contradictory evidence.

For example, there was recently a documentary about the big dam in Washington State built by FDR.

There were local power companies, who simply wanted to keep their profits - they had no interest in a massive investment they couldn't afford for new power far more than the people needed. Wall Street similarly had no interest in the risk involved. Republicans in Congress said 'no' when in power, basic anti-government ideology.

This went on for about a decade with no funding.

But FDR built it with a huge investment. And sure enough, many people moved to the area taking advantage of the power, and it was great for the country.

Second example - say for the sake of argument that single-payer healthcare, like the rest of the world, will help our economy greatly, reducing inefficient costs for healthecare.

Will the 'private sector' make that investment on its own? No, it can't - it'll continue to invest in the private insurance companies and other inefficient, profitable structure.

Roads are a third example, public college a fourth, of things great for the economy the private sector isn't going to do on its own, with tiny exceptions.

Oh, we have a massive private college industry - filled with ripoffs and waste, overmarketing for profit.

The private sector does some things great, but so does the government, and both are very important to the economy.
You are setting up a straw man. Most on the right will concede that there are certain infrastructure investments that are best handled by the government. That's doesn't mean that all government investments in infrastructure are good. That's also separate from Keynesian economics which states that it doesn't matter what the government spends money on as long as it spends.
 
Oct 16, 1999
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You are setting up a straw man. Most on the right will concede that there are certain infrastructure investments that are best handled by the government. That's doesn't mean that all government investments in infrastructure are good. That's also separate from Keynesian economics which states that it doesn't matter what the government spends money on as long as it spends.
That's flat out false. Keynes specifically touted deficit spending to increase aggregate demand.
 

the DRIZZLE

Platinum Member
Sep 6, 2007
2,956
1
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That should be pretty easy to figure out.

The 'failure' of the stimulus was in degree, not principle. The inadequacy of the stimulus was widely stated before it was ever enacted, because it was only about half the size of the output hole it had to fill. Still, its results were very much of the type predicted by its proponents. The stimulus vindicated the principles of Keynesian economics.
I disagree with your interpretation of the results. The macroeconomic data has been far worse than was predicted when the stimulus was being proposed. I'm sure you will respond that the situation was worse than we thought but then we are back to the fundamental problem of taking economic schools policy opinions as articles of faith.

As a proponent of fiscal discipline I would not be so bold as to claim it would produce short term growth. At a philosophical level, Austrian and New Classical Economics are based on the idea that managing for the short term is a futile exercise.
 

Craig234

Lifer
May 1, 2006
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That's flat out false. Keynes specifically touted deficit spending to increase aggregate demand.
Funny enough, though, let's look at 'deficit spending on anything' for a moment.

Now, first let's pick a massive amount of spending - way more than we can afford.

What to spend it on that will not only be not useful, but even greatly harmful?

Oh, I know. Let's spend the money for the following things:

- Collect huge amounts of natural resources, take them out of the economy and put them in the bottom of the ocean, unused.

- Hire a small group who goes out and murders hundreds of thousands of our most productive employees.

- Kidnap millions more workers and lock them up on an island.

Now, is that a recipe for growing the economy? I don't think it's in textbooks.

Yet - what I just described is what we did, economically, in WWII, and that economic activity, nothing but wasting resources and labor, is credited with economic recovery.

So maybe this deficit spending isn't all that bad - and even better when used like FDR did for useful activities. As opposed to the rich hoarding wealth - like the 1920's.

How did the Republican 'rich hoarde wealth' policy go?

And oh wait, it wasn't just the war spending - then it was massive government spending for 'GI bills' giving millions of people asistance buying homes and school.

Leading to prosperity, while the wealth took a smaller share of the nation's wealth and paid a larger share of taxes.
 
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Oct 16, 1999
10,497
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I disagree with your interpretation of the results. The macroeconomic data has been far worse than was predicted when the stimulus was being proposed. I'm sure you will respond that the situation was worse than we thought but then we are back to the fundamental problem of taking economic schools policy opinions as articles of faith.

As a proponent of fiscal discipline I would not be so bold as to claim it would produce short term growth. At a philosophical level, Austrian and New Classical Economics are based on the idea that managing for the short term is a futile exercise.
And that's where it should stay because it sure as fuck doesn't work on any practical level. We have hard data to that effect, as well hard data on the effectiveness of Keynesian. There's no faith involved other than in the validity of math and science.
 

fskimospy

Elite Member
Mar 10, 2006
72,136
22,555
136
I disagree with your interpretation of the results. The macroeconomic data has been far worse than was predicted when the stimulus was being proposed. I'm sure you will respond that the situation was worse than we thought but then we are back to the fundamental problem of taking economic schools policy opinions as articles of faith.

As a proponent of fiscal discipline I would not be so bold as to claim it would produce short term growth. At a philosophical level, Austrian and New Classical Economics are based on the idea that managing for the short term is a futile exercise.
You're welcome to disagree with my interpretation. I don't find your disagreement to be supportable with the evidence, nor does your complaint even address the main point of my post which was that the stimulus was a 'failure' of degree, not of course. The evidence of the stimulus' success has nothing to do with faith, it has to do with reams of nonpartisan economic analysis.

'Faith', interestingly enough, is the basis for Austrian economics. This is of course one of the problems with arguing with Austrians, no amount of evidence will shake their articles of faith because they were never based on evidence to begin with. (and of course Austrian economics rejects empirical evidence anyway)
 

Matt1970

Lifer
Mar 19, 2007
12,321
2
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I disagree with your interpretation of the results. The macroeconomic data has been far worse than was predicted when the stimulus was being proposed. I'm sure you will respond that the situation was worse than we thought but then we are back to the fundamental problem of taking economic schools policy opinions as articles of faith.

As a proponent of fiscal discipline I would not be so bold as to claim it would produce short term growth. At a philosophical level, Austrian and New Classical Economics are based on the idea that managing for the short term is a futile exercise.
They new exactly how far the housing market was falsly inflated. The Stimulus would have been far more effective if Obama wasn't attacking Corporations at the time. He's still doing it to this day. The stock market doesn't like that much.
 

the DRIZZLE

Platinum Member
Sep 6, 2007
2,956
1
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And that's where it should stay because it sure as fuck doesn't work on any practical level. We have hard data to that effect, as well hard data on the effectiveness of Keynesian. There's no faith involved other than in the validity of math and science.
The studies on the fiscal multiplier (a core component of Keynesian economics) are all over the map, but skew toward disproving Keynes' ideas. Furthermore, New classical economics uses just as much math as Keynesian economics, it's just different math. Considering Tom Sargent just won the Nobel prize for work in this area I wouldn't be so quick to dismiss it.
 

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